[Note from editor: The “Mastermind Showcase” highlights companies and news from members of the GEM. Today’s showcase: CREtelligent]

A commercial property due diligence service provider before, during, and post-transaction, CREtelligent provides analytics and professional insights to CRE brokers, lenders, credit unions, REITS, insurance firms, retail businesses, and legal firms. Their suite of products handles remedial tasks and due diligence digitally which allows customer’s focus on the high-value aspect of their business, especially high-volume teams managing a lot of deals. Their EnviroPreScreen reports include pre-screening tools and on-site property inspections with detailed investigation results like needed repairs and associated costs. CREtlligents services also help SBA lenders and Certified Development Corporations meet underwriting requirements for environmental factors and risk management by utilizing CREtelligents zoning, surveys, and flood certificate services.

What we like: Its suite of environmental reports, property condition reports, and on-site property inspections centralizes risk management and underwriting requirements into a nice bundle.

Learn More

The post Simplified and Centralized Commercial Property Due Diligence appeared first on GeekEstate Blog.

As a real estate professional, it is your job to stay on top of market trends, pricing analysis, buyer and seller behavior, and tenant needs, and that includes new technology too. Like me, I’m sure you’re stretched for time and bandwidth, and the thought of having an AI-powered assistant to speed up certain tasks may seem like a way to automate your workflow. 

ChatGPT, the artificial intelligent chatbot, is all the rage right now. With 13 million active users visiting the platform each day, you may be itching to know if it is worth the hype. That question is up for debate, but many real estate professionals claim that it has the potential to change the way you work. While it is gaining popularity fast, it is important to recognize the limitations of ChatGPT too, as human touch is still needed in many areas. Below are ways that I believe ChatGPT can be most useful for property managers and landlords, as well as a few areas of which you should be aware. 

Ways that ChatGPT can be helpful 

ChatGPT is able to do things like write property listings, create social posts, draft responses to tenant emails, research land zones, and even calculate mortgage payment estimates for clients. You can also use it to generate scripts for YouTube videos, re-word complex communications with clients and tenants or leverage it for inspiration if you’re struggling with ideas for your blog or website.

While it isn’t perfect, it is a great starting point and has the potential to save you a lot of time. If you aren’t happy with the first response that you receive from ChatGPT, you can regenerate content or ask it to add more details, for example, you could ask it to update a property listing with a fireplace in the living room or make the tone of a drafted email response more conversational or formal. Here are a few examples of ChatGPT’s responses when my team asked for property listing descriptions, emails, and social media posts. You may be surprised by the type of content it produced! This can be especially useful if writing isn’t necessarily your strong suit, and you need some assistance.

Limits of ChatGPT 

Like anyone or any tool, ChatGPT is not fool-proof, and there are certain scenarios where you should avoid using it or at the very least practice close scrutiny. It can miss details, and critical information, like important appliances and features that should be highlighted in your property listings. These are features that only you or someone on your team would catch given your skill set and since you know the ins and outs of the property.

In addition, you should always review and edit tenant and public communication, like blog posts, and social media posts, before sharing or publishing. The current version of ChatGPT cannot verify sources in real-time, which is a downside, as you could receive inaccurate or outdated information. Finally, I recommend that you continue to work with subject matter experts for producing and sharing financial, legal, and regulatory documents, like lease agreements, addendum creation, legal documentation, or landlord-tenant laws or regulations. 

Final Thoughts 

AI is and will continue to be a hot topic in the real estate industry. Zillow has been using AI for 3D mapping, creating automatic floor plans, and for its Zestimate tool, which can scan pictures to see if a home has hardwood floors or stainless steel appliances to help with a price estimation. You can also expect to see other chatbots, like Google’s Bard, soon too.

Regardless, AI and chatbots should be on your radar, both for their benefits and challenges. As you can see from above there are ways that property managers and landlords can embrace this technology – and there are some scenarios where you should avoid using it. Either way, AI is here to stay and will become a big influencer, and you don’t want to be left in the dark. I suggest you learn, explore and incorporate some of the above best practices and test and learn to see how they can benefit you and your business. 

The post ChatGPT Best Practices for Landlords and Property Managers appeared first on GeekEstate Blog.

CityBldr’s Local product that we mentioned a few weeks back, is now FREE for a month in 150+ US cities.

Since COVID, housing insecurity and homelessness have risen. Housing exists at the base level of Maslow’s hierarchy of needs…people and communities need housing to survive, much less thrive.

There is one thing every community in the US has in common: they’re built on land.

CityBldr has located over 10 million housing units trapped in underutilized land in communities all across the country. Interested in finding and developing some of that real estate?

Search for your City

**I’m an investor in CityBldr.

The post CityBldr Local Free for 30 Days appeared first on GeekEstate Blog.

In this week’s founder interview, we’re bringing you Jeff Weiner from Realquantum.

Without further ado…

Who are you and what do you do?

My name is Jeff Weiner and I am the CEO and Co-Founder of Realquantum. Realquantum is a SaaS company providing web-based commercial real estate appraisal software and database products that significantly accelerate the appraisal process. We are on a mission to transform commercial real estate appraisal with a platform that empowers appraisers to deliver high-quality, accurate valuation insights faster than ever.

What problem does your product/service solve?

Realquantum is solving for the unnecessary time spent on mundane and repetitive processes involved in preparing commercial appraisal reports. Appraisers commonly use outdated or varied formats for their reports, resulting in mistakes such as including a previous client’s name in a new report or making calculation errors in Excel when making last-minute changes. These issues cause several problems, including longer review times for the practice manager, scalability issues, profit margin losses, and slower delivery times. However, with Realquantum, these errors are eliminated, and the reporting process is streamlined through a comprehensive database that stores all information related to clients and properties. Additionally, customers retain ownership and control of their data, including comps, ensuring its privacy.

What are you most excited about right now?

We recently announced that Cushman & Wakefield selected Realquantum to provide its cloud-based appraisal platform for the firm’s U.S. Valuation & Advisory practice. This is especially exciting for our company because it affirms our vision to move commercial appraisal beyond spreadsheets.

What’s next for you?

Our primary focus in 2023 is growth. The global commercial real estate market continues in a state of rapid change. E-commerce continues to erode retail and grow industrial. Remote work is starting what will be a profound impact on office property and central business districts everywhere. The need for accurate, quality and FAST appraisals of all commercial property types is only going to increase. We are laser-focused on delivering the best product possible.

What’s a cause you’re passionate about and why? 

I’m involved in various charity activities but perhaps the one I’m passionate about most is better treatments and eventually a cure for Multiple Sclerosis. This disease has impacted my family and I hope one day to be around when it is finally vanquished.

Thanks to Jeff for sharing his story. If you’d like to connect, find him on LinkedIn.

We’re constantly looking for great real estate tech entrepreneurs to feature. If that’s you, please read this post — then drop us a line (community@geekestate.com).

The post Meet The Real Estate Tech Entrepreneur: Jeff Weiner from Realquantum appeared first on GeekEstate Blog.

[Note from editor: The “Mastermind Showcase” highlights companies and news from members of the GEM. Today’s showcase: Stake]

A fintech company and loyalty network, Stake enables multi-family owners and operators to reduce delinquencies, increase leads, and generate more renewals. Serving more than 40,000 units, they do that by helping renters save through cash back and banking. It integrates with Yardi, Entrata, RealPage, and MRI to import property and resident data. 

For property operators: Incentivize renters for actions like referring a renter, paying rent on time, and renewing their lease early. 

For renters: Use a Stake Visa Debit card for money back on every purchase and no annual fees.

What we like: A debit card is a nifty adoption tactic. 

Learn More

The post Incentivising Renters With Cash Back appeared first on GeekEstate Blog.

[Note from editor: The “Mastermind Showcase” highlights companies and news from members of the GEM. Today’s showcase: Matrix Rental Solutions]

A tenant analysis fintech platform, Matrix Rental Solutions has built a tenant scoring model called MAIA (Matrix Asset & Income Analysis) that allows landlords and property managers to underwrite and approve tenants quickly, particularly in the area of affordable housing. Its universal rental application uses machine learning and direct connectivity to gather information on assets, income, previous rental history, and employment data to provide more complete applications in a consistent format. Rather than using credit as a sole indicator, MAIA uses multiple data points to produce an “ability to pay” score. Their process also reduces Source of Income discrimination potential by considering the subsidy and automating the underwriting process.

What we like: Screening tenants in less than an hour, rather than several days, is a big efficiency improvement.

Learn More

The post Optimizing Rental Applications appeared first on GeekEstate Blog.

An applied academic institution at the University of Utah’s David Eccles School of Business, Ivory Innovations is dedicated to supporting innovative solutions in housing affordability. They recently announced the Top 25 Finalists for the 2023 Ivory Prize for Housing Affordability (from 203 nominees).

Finalists are divided into three categories (Construction & Design, Finance, and Policy & Regulatory Reform) and have demonstrated innovative, achievable, and scalable solutions to the housing affordability crisis. The Top 10 will be announced in April, with the final winners to be announced in May.

Without further ado…

Construction and Design

BotBuilt: Uses robotic systems, patented hardware, and motion planning with computer vision to provide more sustainable options in construction.

Diamond Age: Builds 3D printing and advanced industrial-scale robotics that construct houses. Is currently automating new home construction of entry-level homes for the 9th largest homebuilder in the U.S., Century Communities (Realstar).

Inherent L3C: Their community housing production facility delivers all-electric, solar-ready smart homes. Works with public, private, and nonprofit organizations to prepare households for homeownership and provide support services for a household’s first five years.

Madelon: Streamlines and productizes the infill housing development process by integrating each component into its online REDtech platform. Including pre-designed housing compatible with industrialized housing manufacturers. This provides small local developers, non-profit institutions, and even community trusts with construction technology to recognize and build affordable housing at scale.

Plantd: Utilizes fast-growing perennial grass to make durable carbon-negative building materials. They are implementing a new agricultural supply chain and building manufacturing technology to lower costs and reduce carbon emissions.

Timber HP: Recycles waste wood chips leftover from the production of lumber, boards, and sheathing into loose fill, batt, and continuous board insulation. This makes their products cost-competitive and high-performing compared to typical insulations that are made from petroleum and require large energy inputs.

Tough Leaf: A B2B SAAS platform that helps certified Minority, Women, and Veteran owned businesses by connecting them with General Contractors & Developers.

Vantem: Reduces the cost of delivering affordable, energy-efficient, climate-resilient homes at scale by leveraging a structural panel technology to factory-craft modular structures.

Finance

Arx: An AI-driven real estate analytics platform that automates the underwriting process. This enables developers, investors, and agents to efficiently source and evaluate optimized investment and development opportunities.

Bilt Rewards: A rewards and payments program for helping renters build their credit and earn points back on rent with no fees for them or their landlord. Points can be used on rent and other expenses towards a downpayment on a home.

CoFi: A vertical construction finance platform that is piloting a new modular construction financing program with Manufactured, a centralized inventory manufacturing and finance solution.

Dearfield Fund for Black Wealth: Provides first-time Black and African American homebuyers with up to $40,000 in down-payment assistance. Currently generating an average of $100K in net worth for 500-600 Black families in Denver, CO. Launched by Gary Community Ventures, in partnership with Denver’s Black community

Frolic Community: Is building thousands of new, multi-family housing cooperatives with $10-$30k down payments on single family home lots.

RenoFi: A marketplace for home renovation financing that increases borrowing power for customers with their RenoFi-powered loans.

Roots Investment Community: A privately held Real Estate Investment portfolio allowing residents to “Own While You Rent”TM by investing their rental deposit into the Roots Fund. Residents are invested alongside accredited investors in a REIT and can also earn rental rebates through the “Live in it Like you Own” program.

Trust Neighborhoods: A nonprofit providing community-controlled real estate in areas threatened by gentrification. To do s they created the Mixed-Income Neighborhood Trust, or MINT, that owns and operates a portfolio of community controled rental housing that maintains permanent affordability. Currently, there are MINTs opering in Boston, Fresno, KC, and Tulsa.

Public Policy and Regulatory Reform

Black Homeownership Collaborative:  A coalition of more than 100 organizations and housing advocates working to create 3 million new Black homeowners by 2030. To do so they have created seven steps to help black homeowners buy a home by connecting them with non-profit homeownership advisory services, downpayment assistance programs, a real estate agent, and mortgage lender.

California Dream for All Shared Appreciation Loan Program: Has created or preserved 73,000 affordable rental units and helped more than 213,000 low- and moderate-income Californians gain homeownership through various down payment and closing cost assistance programs.

Housing Connector: A nonprofit streamlining the housing search experience with automation, partnerships with housing providers, and an exclusive Zillow-powered marketplace to ensure no unit sits vacant.

Housing Navigator Massachusetts: Created a free, transparent housing search tool and works in partnership with the public sector, owners, renters, and human service providers throughout Utah to advocate for systems change.

National Zoning Atlas: An online resource created from the collaboration of researchers digitizing, demystifying, and democratizing ~30,000 U.S. zoning codes. The research shows how zoning lows impact housing availability/affordability, transportation systems, the environment, economic opportunity, educational opportunity, and the food supply.

Next Step: A nonprofit social enterprise that addresses the shortage of factory-builtenergy efficient affordable housing by connecting housing developers with manufacturers and providing homebuyers with guidance and responsible mortgage financing.

Outreach Grid: A data platform that provides homelessness information for agencies to collaborate and coordinate on. They have also created integrated tools for on site data collection by frontline workers. These tools also allow community leaders to visualize their system from first contact to housing. During the pandemic, they helped shelter operators become more efficient by providing them with shelter bed reservation tools.

PermitFlow: Provides an automation and workflow software that reduces the risk and cost associated with construction by simplifying the construction permitting process through.

The Kelsey: Co-develops affordable, accessible, inclusive housing and leads advocacy and field-building efforts to make inclusive housing a standard in the market. Is co-led by people with and without disabilities.

Congrats to all those selected!

The post Meet the 2023 Ivory Prize Top 25 appeared first on GeekEstate Blog.

[Editor’s Note: Below is the full text of our 242nd Weekly Transmission, originally delivered direct to the inbox of more than 600 GEM members on February 9th, 2023.]

The benefits of customer loyalty are well documented. It doesn’t take a rocket scientist to figure out that people like earning something for their time, effort, and attention.

A full 37% of consumers “are willing to pay a fee for access to enhanced loyalty program benefits,” according to 2018 research from Bond. That number jumps to 47% for Gen Z, 46% for Millennials, 44% for households with children, and a whopping 69% for early technology adopters.

Loyalty is not widely distributed though, with 54% of customers only loyal to 1 to 5 brands.

Of course, real estate practitioners are among those in dire need of customer loyalty. Handing over keys to a buyer is far from the end of the relationship. Or, at least, it should be. Everyone jumps to gaining loyalty through regular contact, closing gifts, and recommended contractors. But, what if another way is more likely to succeed? One that involves looking through the clouds.

TAKING FLIGHT
Profit margins for brokerages are abysmal in most cases—without ancillary services, losses would accumulate in a hurry.

A similarly unprofitable industry roams the skies. Over the past several decades, airlines have iterated into a form of financial services. The following sixteen minute video by Wendover Productions details how airlines have quietly become banks since the creation of the first frequent flyer program in 1981:

United’s loyalty program is valued at $21.9 billion, American’s is in the $19.5 to $31 billion range, and Delta’s rings in at $26 billion. The real head turner is that those valuations surpass the valuations for the actual airline companies in all three cases. The airlines, which own their loyalty programs, are loss leaders by a wide margin.

The Wendover video lays out a compelling case that airlines aren’t transportation companies as they appear on the surface, but rather they’re effectively operating as banks. It sure pays to be loyal.

TURBULENCE AHEAD
What if you built a brokerage into a bank the same way airlines iterated over the years?

Moving companies and credit unions already provide a rebate at closing if a partner agent is used. Viva is using a “rent to invest” model based on earning up to 8% of each rent payment into a “Viva fund.” Rewards programs are not a foreign concept in real estate (see our stuffing wallets full of rewards Transmission about Stake, Pinata, Roots, Bilt, etc.), but why has nothing  scaled in the category?

A few plausible reasons:

• Buying and selling real estate is an extremely infrequent activity.
• Brokerages don’t, or aren’t able to, make and keep a promise that is valuable or different to consumers.
• There’s a significant cost to set them up.
• Brokerage operators don’t have the scale or expertise. Multi-family operators don’t either.

The common route of giving cash back at closing is too long of a bet. Saving for a home is a multi-year endeavor in most cases. As a consumer, am I really going to stick with one loyalty program long enough to go all the way through my purchase? Asking a future buyer or seller to remain loyal to a specific real estate loyalty program for multiple years with no near-term realized benefit is a big ask. And, what if my preferred agent is not a partner agent of said program? Then I’m right back to square one. Even worse, what if I decide I should just keep renting? Or, I relocate to another city or state?

So, how could it work?

Consumers purchase home services, groceries, and goods. They earn points for those purchases, which can be redeemed for discounts on commissions, closing costs, down payments, or even real estate investments.

To really make this useful, you’d have to be able to pay down your mortgage or rent with points. That’s the only way to solve for frequency.

And you’d have to get the entire local services economy on board. Those businesses would pay the brokerage for the right to reward their customers with brokerage points.

Credit card partnerships could be part of the equation, but vendors could also allow you to “link” a customer account to a real estate rewards partnership. Lyft already does this for airline partners; expanding to real estate isn’t outside the scope of possibilities.

There’s no easy route. Giving users fractional shares in a stock when spending money on a participating brand was a great start but Bump (mentioned in Newsletter #24) went under last month.

The Rocket Card is proof that the industry has a foot in the race, but Bilt’s wide network of transfer partners to establish the value of its loyalty currency is the closest to this vision. While it’s not likely any of the big franchises or brokerages have the balance sheet strength to acquire Bilt, it would be a sea change if they did.

One thing is certain. With over 3.8 billion loyalty program memberships in the United States, a team, brokerage, or franchise wading into these waters won’t blaze an unknown trail.

This is an evolving chapter. There will be another page to turn, and turn it I shall when clarity strikes.

the GEM BRIEFING

A PRIVATE GROUP OF INDEPENDENT THINKERS, FREE FROM SPONSORED MESSAGES, SALES PITCHES AND NOISE

There are four parts to membership:

• Long-form articles covering the spectrum from shipping container co-living spaces to the battle for listing acquisition in the first iBuyer world war (Weekly Transmission): A Waking of the iBuying Elephant, Certainty as a Service, The Undisrupted: A Portrait of Blue Collar America, Requiring Employers to Assist Employees with Housing Would Unleash Innovation, and Filling the Emerging iBuyer Vacuum.
• Curated real estate, startups, & built world links & analysis blended with out of the box ideas (Weekly Radar): July Monthly Radar 2022.
• Special reports (a category review of Small Landlord Prop Mgmt Software, Blueprinting Proptech startup analyses, Blueprinting Proptech: PadSplit, Blueprinting Proptech: Foxy AI, & Ecosystem Intelligence).
• Networking opportunities with 600+ innovators from across the globe through the private forum & in-person gatherings.

With a mission to attract the 1,500 most forward-thinking, and diverse, innovators, we’re looking for the best and brightest in all the land...

Membership is $139 / quarter

READY TO JOIN RIGHT NOW?

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The post Banking Real Estate in the Clouds appeared first on GeekEstate Blog.

[Editor’s note: Originally published in The Appraisal on February 15th.]

WeWork is currently trading at $1.55 (at the time of writing), off more than 85% from its peak. Despite the miss, several Wall Street analysts have reaffirmed their bullish outlook on the company — their median price target is $7.75, a 4x+ premium to today’s stock price.

This divergence between investor and analyst sentiment inspired me to take a closer look at the company, including its recent performance, cash position, and tailwinds driving optimism in the flex office space. Overall, it’s an interesting case study in business turnarounds and the growing role technology will play in the management of real estate assets.

1.0 — Neumann, Softbank & Community-Adjusted EBITDA

WeWork’s enigmatic founder and lavish spending habits have been well documented in popular media. WeWork was founded in 2008 and its model — flexible leases of “hip” office space targeting startups in urban areas — became instantly popular. Within 5 years of opening their first co-working space, WeWork had more than 50,000 members across 75 locations worldwide. The company’s founder, Adam Neumann, capitalized on its early success by raising billions in venture capital, most notably from SoftBank’s Vision Fund. In total, the firm has poured more than $17 billion into WeWork, including a $2 billion investment at a $47 billion valuation in early 2019.

Despite the eye-popping valuation, many questions remained around the viability of the co-working business model, particularly the cash burn required to scale and operate locations. These concerns were heightened when WeWork published financial as part of a debt offering that showed massive cash burn (net losses of nearly $1 billion in 2017) along with an unusual new metric — “community adjusted EBITDA” — which deducted not only interest, taxes, depreciation and amortization, but also basic expenses like marketing, general and administrative, and development and design costs in an effort to rationalize its unit-level economics.

These issues, among others, led to Neumann’s ouster in late 2019 ahead of a planned IPO, which was eventually scrapped.

2.0 — Mathrani, Softbank (still) & Free Cash Flow (maybe)

In February 2020, WeWorked brought on new CEO Sandeep Mathrani, a real estate executive who had previously led the turnaround of mall owner General Growth Properties. Mathrani and team were tasked with reducing corporate spending, unwinding non-core investments, and navigating a pandemic which disrupted its core co-working business — not for the faint of heart.

Softbank reaffirmed its commitment WeWork by restructuring the business and issuing more than $5 billion in corporate debt, resulting in 65% ownership of the company. WeWork eventually went public in 2021 via a SPAC merger, which valued the business at about $9 billion.

Since its IPO, the company’s market cap and cash balance have declined to $1.2 billion and $460 million, respectively. In December, the rating agency Fitch downgraded WeWork’s unsecured bonds to CCC, which “represents an extremely high-risk bond or investment” according to the agency.

The post A Deep Dive on WeWork appeared first on GeekEstate Blog.

[Note from editor: The “Mastermind Showcase” highlights companies and news from members of the GEM. Today’s showcase: Revive]

The benefits of flipping your own home are attractive to homeowners, but many lack the knowledge, guidance, and access to capital to make the right renovations.

Enter Revive: a home concierge service that identifies the most effective pre-sale home improvements, provides renovation estimates, secures and manages contractors to complete the work, and fronts the cost of the renovations. They’re paid after the home sale closes with no fees, markups, or additional costs to homeowners.

What we like: Renovating before selling is a better value proposition than taking a cash offer or trading up/in, and Revive takes the headache out of the process by making it turnkey.

Learn More

The post Increasing Listing Value Through Guided Presale Renovations appeared first on GeekEstate Blog.

The Housing Innovation Summit, co-hosted by the Housing Innovation Alliance and the University of Denver, is a forum for startups and the homebuilders industry to connect, share ideas, and explore business opportunities. The event takes place April 25-27 in Denver, at the Franklin L Burns School of Real Estate.

They’ve recently announced Pitchfest, a competition to explore innovation across three categories:

1. Design + Build
2. ESG
3. Tech + Data 

Interested in pitching? Both startups and students are eligible, with the deadline being March 14th.

Apply Now

PS: Attending the conference? We’re organizing two Innovators Roundtable Dinners for GEM members (April 26th and 27th). Email us to get a spot.

The post Exploring Startup Innovation across Design + Build, ESG, and Tech + Data appeared first on GeekEstate Blog.

In this week’s founder interview, we’re bringing you Jonah Hanig from Rove.

Without further ado…

Who are you and what do you do?

My name is Jonah Hanig, and I’m the founder and CEO of Rove. Rove is a luxury, remote work-friendly property rental brand, and a marketplace for investors to purchase short-term rentals. We are building the central luxury short-term rental platform for consumers and real estate investors alike.

Rove’s curated portfolio spans eight American destinations, including New York City, The Hamptons, Miami, West Palm Beach, Scottsdale, and Park City. We’re backed with $4M in funding from top venture investors.

What problem does your product/service solve?

A 2022 US Census report found that the number of remote workers has tripled since 2019, but standard rentals aren’t designed for their unique needs. I personally experienced this problem while traveling and struggling to find Airbnbs with good wifi and hotels equipped for groups.

Rove’s rental properties combine the comfort of a home with the convenience of a hotel. All of our homes are reviewed and designed by professional interior designers and are consistently equipped for a luxury rental experience––from spacious kitchens you actually want to cook into ergonomic workspaces with lightning-fast wifi to on-call customer service.  Since onboarding the first property in the summer of 2021, Rove grew from zero to more than $5M of run-rate booking revenue in a time span of less than 12 months.

Rove’s marketplace is an online platform for investors of these properties (and others) to buy and sell short-term rental properties. Comparing the investment performance of prospective for-sale short-term rental properties is challenging. There’s currently no platform to compare for-sale residential properties by historical and/or projected income as short-term rental investments.

Rove is also building compliance data to help prospective home buyers understand if a for-sale property is eligible to be a short-term rental, or is in a city, state, or HOA that may restrict this type of use. So, owners have the freedom to use their own vacation homes part of the year and access tools to better manage and forecast their property’s performance.

What are you most excited about right now?

We recently announced the marketplace, and we have a lot of exciting features we’re launching soon to help investors and vacation-home buyers make better-informed purchases.

While some reports show the short-term rental industry is valued at 100B, it is still in its infancy when it comes to institutionalization. Rove is positioned to become the first place investors come to when they’re considering buying a short-term rental.

What’s next for you?

Our primary focus in 2023 is growing our existing portfolio of luxury rentals to become the leader in our existing markets, and scaling our marketplace alongside the new products we are launching. We are also down on what our customers have been asking for – creating the best possible Rove travel experience for both customers and investors.

We’re also planning on launching in new destination locations across the country, so stay tuned for announcements from Rove.

What’s a cause you’re passionate about and why? 

My parents and grandparents are actively involved in College Bound Opportunities – a fantastic organization that helps underprivileged students with college prep, succeeding throughout high school and college with mentorship and resources at each step. It’s a great charity I hope to be more involved with over time.

Outside of causes, I am a competitive runner – I won the 2022 Hamptons half marathon and got 76th at last year’s New York City Marathon! Trying to stay in shape when I can.

Thanks to Jonah for sharing his story. If you’d like to connect, find him on LinkedIn here.

We’re constantly looking for great real estate tech entrepreneurs to feature. If that’s you, please read this post — then drop us a line (community@geekestate.com).

The post Meet The Real Estate Tech Entrepreneur: Jonah Hanig from Rove appeared first on GeekEstate Blog.

As the real estate industry continues to change rapidly, it is imperative for landlords and real estate investors to stay competitive in the rental market, ensuring they keep properties occupied and bringing in rental income. A large selling point for many potential tenants surrounds the types of amenities and smart home technology offered at a property. This is especially true for the younger, tech-savvy tenants who are looking for ease of living through updated technology within the property and additional amenities as simple as in-unit laundry. Here are some ideas to keep your property at the top of the list. 

Fiber Optic Internet Connection

Having a strong and reliable internet connection at a property is so important! It does cost a bit extra monthly and requires installation by a professional; however, there are many pros to having this amenity. Since the start of the pandemic, many individuals continue to work from home full-time and rely on a good connection for their occupation. In addition, if there are more than two tenants, or a multi-family household, offering a fiber optic internet connection is a plus as it will be able to withstand several devices on one server. Also, for tenants interested in the gaming industry (which is booming with an annual growth rate of nearly 13%), having a strong and fast internet connection is crucial to live streaming video games. This amenity can be a make or break deal in landing a new tenant.

Keyless entry

We have all seen keyless entry pads, and how convenient it is. Why not include it on the main doors of a property? If you are tired of constantly having to contact a locksmith or go to the machine at your local hardware store to replace lost keys, you can install a keyless entry pad for a relatively inexpensive cost. Keyless entry provides security and peace of mind for both the landlord and tenant.

Security Cameras

Security cameras are a great feature to include on a rental property. It can come in handy for any legal issues such as property damage or theft. It can also deter any criminal activity from occurring on a property. All tenants will feel safer knowing that they have this extra layer of protection, allowing them to feel secure while they are home or while away.

Package Delivery System

Offering a package delivery system is often overlooked to many landlords. However, with the increase in package thefts from many front doors and porches, it isn’t a bad idea to offer some sort of secure method for deliveries. There are several types of systems of all different price ranges that can be installed at a property, such as a simple package lock box that can be placed on a porch or a locker system through a third party. Tenants will feel secure knowing that strangers are not trespassing to steal packages.

Online Rent Payment

Online rent payment is beneficial to both landlords and tenants. It provides an electronic record of rent payments that can be easily printed out. In addition, tenants can pay rent from anywhere in the world. There are several options of online payment portals for landlords looking for the best way to receive tenant payments. Online portals offer landlords additional features such as ability to charge additional fees, refund tenants, property marketing, tenant background checks, renters insurance and many more.

Fitness

Whether a landlord offers fitness equipment or enough empty space for a tenant to roll out an exercise mat, space in a property for at-home exercise and other activities is crucial for a tenant’s overall health. The space could be part of the living area, or “dead” space at the top or bottom of a flight of stairs. Offering the basic fitness necessities goes a long way and tenants appreciate it.

Creative Space
While fitness space is a must, there’s a new type of flex space that some tenants may be seeking. As many younger generations are keen on social media, more people than you might think are developing content and participating in podcasts and other creative endeavors. Stay ahead of this technology curve by offering space – whether it is a corner in the property, or a soundproof room – dedicated to tenants’ creative thinking and content development skills. 

Outdoor Space

Access to the outdoors is great for everyone young and old! Whether it is a small porch or patio, or a large backyard, access to an outdoor space is always a plus to any tenant. It is especially important to tenants with pets. However, if outdoor space is not feasible, having great natural lighting is always a good substitute. In addition, close proximity to a park or trails is typically sufficient for active and pet-owning tenants.

There are so many options that landlords can implement on a property to attract and retain tenants. Paying attention to trends and staying up-to-date on what tenants seek in a rental property can help keep landlords competitive in the rental marketplace – and help avoid any costly vacancies.

The post Trendy Ways Landlords Can Attract and Retain Tenants appeared first on GeekEstate Blog.

[Editor’s Note: Below is the full text of our 239th Weekly Transmission, originally delivered direct to the inbox of more than 600 GEM members on January 11th, 2023.]

Collectively, the GEM is a diverse community of proptech innovators spanning every role, sector, and geography.

While the biz intel, innovative thinking, and curation are valuable, most members are here to rub shoulders with peers making a mark on the world—we continue pushing the ball forward to facilitate curated connections. Again this year, there is still an immense amount of work before we fully realize the GEM’s potential as table stakes for successful founders.

Without further ado, maintaining the tradition started three years ago to report transparently on the makeup of the community, we bring you… the State of the GEM in 2023.

Total members: 605

…from sectors far and wide

…in varying roles

…representing locations across the globe

Before we dive in, note: We’re 60% of the way to our cap of 1,500 members. Know someone who should be here? Send them this two-pager.

MACRO SECTORS

We’re still heavily residential, and that will remain the case in 2023. We broke out Rentals as its own sector, given our focus on it and its representation in the GEM. We didn’t successfully migrate everyone, so that category will likely see a huge uptick in members after another year of combing through our data.

ROLES

The roles makeup remains largely the same as a year ago.

GEOGRAPHIES

We picked up more members in most of our core cities, adding more than 20 in New York and another 15 in Greater Los Angeles. It’s interesting to note that the Bay Area actually declined from 70 to 67. A hypothesis: founders moved away during the pandemic and our data just now caught up to the migration.

DIVERSITY

Female: 15.87% (up from 15.05%)

Persons of Color: 20.17% (up from 16.04%)

EVENTS / NETWORKING

Events happened! Three years delayed, but we got there. And we’ll improve on that output in the year ahead.

Our VIP Dinner series continued in partnership with Resident with two dinners (April during Inman and October during CREtech). The Seattle founders dinner, which Plunk hosted at its corporate HQ, was a personal highlight given it was the first “proper” Seattle-area dinner in our hometown. Another noteworthy event: Our largest dinner of all time—42 attendees—took place during Blueprint in Vegas. I suspect we’ll top that with 60 or even 80 dinner attendees at Blueprint 2023. If you’re interested in joining us for the 2023 GEM Community Dinner during Blueprint, please join the GEM.

On the happy hour and Soiree side, I’m pleased with 2022 numbers. 

Lackluster office hours output was sorely disappointing. We’ll get to 12 in 2023: Clelia Peters hosted January’s, and we have monthly hosts lined up through April already—Tigre Wenrich, Dave Garland and Heather Widman. If you’re a VC and interested, shoot us a note and we’ll get you on the calendar.

Virtual networking-wise, we have announced the beta of the new and improved Proptech Roulette. That will remain a central focus moving forward.

2022 REFLECTIONS

Let’s briefly look back on last year’s resolutions:

• Dinners (12): Win. But just by a hair (13).
• In-person opportunities: Win. It was a heavy travel year and we hit almost every city we said we would. Denver was the exception. To make up for that, I’ve already booked a flight in April to attend the Housing Innovation Summit, and I’m hosting two innovators roundtable dinners back to back.
• Diversity: Draw (plus a smidge). We improved slightly in the persons of color category, going from 16.04% to 20.17%. That’s a win in my book. However, the percentage of women remained flat.
• Workgroups: Win, but with reservations. We started the two initial groups (Affordability and Blockchain), and had several super-interesting discussions as part of that. But we should have maintained a more consistent cadence.
• Bring back early-stage fundraising office hours + peer practice pitches: Lose. We didn’t bring this back with the consistency needed to consider it a success.
• Completion of membership clean-up: Draw. We’re close, but not quite there. On the plus side, we’ve been consistently migrating old members from Paypal to ChargeBee and have removed or converted almost all of our previously comped members.
• Raising (new member) pricing again: Win, as we raised prices from $129 to $139 per quarter early in the year.

Overall 2022 Score: 4-2-1

2023 RESOLUTIONS

• Test and incorporate generative AI tech: Our belief is you don’t truly learn unless you do something first-hand. So, we’ll continue our testing with Jasper and others, leveraging these tools for graphics, copy (we’ll disclose when/if/where we do this), and potentially even audio/video.
• Ecosystem Intelligence for affordable, accessible, or sustainable housing: With a housing crisis upon us, we commit to helping founders and capital providers alike navigate the companies working to combat it as part of GEM’s Ecosystem Intelligence series.
• Successfully migrate remaining Paypal users to Chargebee: It’s a tall order, but we’ll continue one membership at a time.
• Develop more integrated internal systems and reporting: We’ve been slowly improving our internal monthly reporting, and a new and improved master member spreadsheet is a major deliverable to ourselves in 2023.
• More dinners: We’ll hit the 15 dinner mark–including another two VIP Dinners with Resident, a Seattle founders dinner, and SF.
• Proptech Roulette launch and roll-out: We’ve been searching for a platform like Intros.ai for a couple of years. Now that we’ve found it, we’re super excited for the new possibilities.
• Raise (new member) pricing: This year, we’ll update pricing from $139 to $147 per quarter, but keep the $497 yearly price point to add a larger incentive to pay for longer memberships.

PUSHING FORWARD

It’s going to be a tough year for growth across every industry. That’s a certainty in an uncertain world. Don’t despair: I’m hugely confident kernels of greatness will unearth themselves in the year ahead.

Through thick and thin, our pursuit remains to deliver every proptech founder all the connections, peer support, and business intelligence needed to propel their company to greatness.

Here’s to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes… the ones who see things differently — they’re not fond of rules… You can quote them, disagree with them, glorify or vilify them, but the only thing you can’t do is ignore them because they change things… they push the human race forward, and while some may see them as the crazy ones, we see genius, because the ones who are crazy enough to think that they can change the world, are the ones who do. — Steve Jobs, 1997

the GEM BRIEFING

A PRIVATE GROUP OF INDEPENDENT THINKERS, FREE FROM SPONSORED MESSAGES, SALES PITCHES AND NOISE

There are four parts to membership:

• Long-form articles covering the spectrum from shipping container co-living spaces to the battle for listing acquisition in the first iBuyer world war (Weekly Transmission): A Waking of the iBuying Elephant, Certainty as a Service, The Undisrupted: A Portrait of Blue Collar America, Requiring Employers to Assist Employees with Housing Would Unleash Innovation, and Filling the Emerging iBuyer Vacuum.
• Curated real estate, startups, & built world links & analysis blended with out of the box ideas (Weekly Radar): July Monthly Radar 2022.
• Special reports (a category review of Small Landlord Prop Mgmt Software, Blueprinting Proptech startup analyses, Blueprinting Proptech: PadSplit, Blueprinting Proptech: Foxy AI, & Ecosystem Intelligence).
• Networking opportunities with 600+ innovators from across the globe through the private forum & in-person gatherings.

With a mission to attract the 1,500 most forward-thinking, and diverse, innovators, we’re looking for the best and brightest in all the land...

Membership is $139 / quarter

READY TO JOIN RIGHT NOW?

Apply for Membership

The post State of the GEM 2023 appeared first on GeekEstate Blog.

REACH operates a variety of accelerator programs around the globe, created and operated by Second Century Ventures and backed by NAR. Applications for its flagship REACH & REACH Commercial classes are open until January 31st.

Only 16 days left to apply! Interested in learning more about the 2023 REACH programs and application process? Join Tuesday, Jan 17 at 1:00 PM CT for a virtual meet & greet with Bob Gillespie (Executive Director, Commercial) and Ashley Stinton (Executive Director, Residential).

Register Now

The post Meet the REACH and REACH Commercial Teams – January 17th appeared first on GeekEstate Blog.

[Editor’s Note: Below is the full text of our 239th Weekly Transmission, originally delivered direct to the inbox of more than 600 GEM members on January 4th, 2023.]

For two straight years our central prediction theme was climate (2021 version). The importance of climate hasn’t lessened in 2023. In fact, the impact of the Inflation Reduction Act will reverberate for years to come.

That said, we’re going back to the basics in 2023: profits rule and negative unit economics drool.

When capital was nearly free for corporations, products and services not feasible in normal environments became feasible. Well, the music has stopped and the chickens have come home to roost. Unprofitable companies can no longer hide behind a “grow at all costs” directorate.

Bryan Copley is a firm believer the tortoise will be sexier than the hare this year:

The Fed will continue to grind the gears of economic growth, and the cheap capital financing meteoric startup growth for companies without a plausible path to profitability has dried up faster than the Los Angeles River. The age of cheap growth is a bygone age; growth in 2023 and beyond will be earned, not bought.

Imagine startups are race cars and interest rates are gas prices. When gas is cheap and it’s a drag race to the SPAC that takes you public, acceleration is all that matters. Now that gas is expensive and the finish line further away, acceleration takes a back seat to gas mileage. For the first time in a long time, the tortoise is sexier than the hare.

Startups shouldn’t optimize to meet Warren Buffet’s standards for company profitability. Buffett invests mostly in de-risked, low alpha companies with mature, stabilized cash flows. VCs comb the earth for high alpha opportunities where they can take calculated, concentrated risks on companies with asymmetric upside potential.

Today, as in the bygone age of cheap growth, startups and investors alike will continue to take and embrace risk. Like KPCB cofounder Tom Perkins said:

‘If there is no risk, you have already missed the boat.’

But in 2023, look for startups to begin architecting slower, steadier, more sustainable growth models that yield more capital-efficiency—perhaps even profits!—prior to an IPO.

The return of business pragmatism. Fighting tooth and nail to put every dollar in the bank, day after day, month after month. 2023 will be a year that perseverance, grit, and belly-to-belly combat on the business battlefield wins.

-DM

Below, GEM members share a range of interesting trends and predictions for 2023.

PROPTECH TRENDS

GENERATIVE AI ONSLAUGHT
Drew Meyers // Founder, Geek Estate

My services are no longer required. Let’s put GEM on autopilot and we can all learn from the bots.

In all seriousness, the ramifications of what’s coming from OpenAI’s ChatGPT and others are beyond immense. The speed of progress with this technology is like nothing we’ve ever seen. Likening it to a locomotive with no brakes would be an understatement.

Writing listing descriptions will become an art of the past. Conversational customer service and sales bots will actually become tolerable. Perhaps, dare I say, interesting. Social media content writers and graphic designers will be in search of new revenue streams. Home buyers will be provided a personal assistant that talks their language, and has access to their financial and home browsing data.

Some say video will avoid extinction the way other content will not. But, if Morgan Freeman’s deepfake and Val Kilmer’s convincing AI voice are any indication, we’re in trouble:

Endless ethical questions arise when there are few, if any, lines between real and fake. We’ll constantly debate the implications of synthetic reality, and we will both blur and grossly cross many lines that once defined reality and work up until now.

On the plus side, the value of thoughtful curation and expert analysis will increase in value as the internet turns into a cesspool of auto-created, time-wasting marketing copy.

POWER OF THE MACHINES
Dave Garland // Partner, Second Century Ventures

We are in the midst of one of the most profound cultural evolutions in human history. Breakthrough technology in robotics and AI, powered by algorithms and mounting data sets, will elevate humanity to new heights. 2023 will be a BIG year for machine-based enhancements. What does this mean for real estate? We can expect a tale of juxtapositions:

• Peak AI?: We will see GPT4 in the spring. Combined with incredible new generative AI applications in text, image, and video, human creativity will be challenged to expand its horizons by computer-based creativity. But real estate practitioners will not likely adopt this new tech en masse. Rather, we can expect to see improvements within existing systems (i.e. transaction management, CRM, B2C advertising) that leverage AI for incremental cost savings in a period where transactions are in decline YoY. (Look to companies like Notarize, Plunk, and Evocalize for clues.)
• Intersectionality: Growing data sets will yield more decision engines to automate complex tasks across industries and segments. For real estate, this means emerging technologies can better integrate brokerage with lending, title, insurance, and all settlement services for a more streamlined, digitized customer experience (ideally at a lower cost). (Look to companies like CRETelligent, Transactly, HouseCanary and Obie to lead the way here)
• Affordability: The three killer ‘i’s of 2022 (interest rates, inflation, and inventory constraints) will put a heightened focus on affordability in 2023 as consumers around the globe are presented with a growing cadre of financial products to extract more equity from an existing asset, or help procure an asset in a period of growing credit constraints. Look for more down payment assistance, equity release, fractionalization, and private equity placements to collide with traditional bank-based underwriting models in effort to help address this growing global concern. (Look to companies like Landis, Fractional, Matrix, and FutureRent for leadership in this space.)

NEW FORMS OF OWNERSHIP DEMONSTRATE MOMENTUM
David Bluhm // Co-founder, Plunk

Companies like Arrived, Fractional, Here, Flock Homes, and Rook Capital light new paths towards becoming a real estate investor for as little as $10 and 10 minutes. The ability to become a rental property owner without the traditional hurdles of time and money is a game changer toward making real estate ownership more accessible to everyone. The ownership revolution is the future, and the pace is accelerating.

OPENDOOR OPENS THE DOOR TO A NEW NATIONAL MLS
Robert Hahn // Partner, 7DS Associates

Opendoor launched its Opendoor Exclusives marketplace, which allows sellers to connect directly with buyers in several markets without the use of traditional real estate agents. Part of the company’s 3P Platform, the marketplace includes an e-commerce experience for buying an Opendoor-owned home.

Opendoor is outright telling everybody that it intends to get rid of both real estate agents and “traditional listings.” No MLS or REALTOR Association can let that stand. Plus, under the rules today, Opendoor Exclusives—whether 1P or 3P—end up on Zillow’s second tab.

That means Opendoor will be forced into becoming an MLS, more or less. It won’t actually be an MLS in the traditional sense, just like the Customer-Owned Exclusive is not a “listing” in the traditional sense. It’s not as if agents can enter listings into the Opendoor 3P Marketplace and get credit, cooperation, or compensation. But it will be an MLS for the purpose of getting Opendoor properties onto Zillow, Homes.com, and other portals. Longer version on Notorious ROB.

ADOPTION OF SUSTAINABILITY PRACTICES
Jonathan Klein  // Founder, GoProptech

With the global emphasis on strengthening ESG principles for growth and operations,  the real estate technology industry will accelerate the integration of sustainability practices in 2023. Due to reliance on the efficiency of materials, energy, time, and money, sustainability is not limited to the environment. Advanced 3D technologies—including BIM, real-time 3D visualization, 3D printing, 3D renderings, and AR/VR—will enable the design, creation, prefabrication, and photorealistic representation of sustainable and green 3D models. Digital twins will further contribute to building resilience, fostering decarbonization, optimizing work environments, and enhancing every decision-making phase, from concept, design, and construction through to operation. Beyond the environmental benefits, real-time visualization technology will attract a new generation of architects and designers, who will create enticing buildings for investors, buyers, leaseholders, and stakeholders. 3D visualization may very well be the remedy tonic for a sagging 2023 real estate market.

A BOON FOR FLAGSHIP TRAVEL DESTINATIONS
Wes Walker // CEO & Co-founder, Propersum

The current Effective Federal Funds Rate (EFFR) upward march, combined with increased media attention on household finances, will result in general travel accommodations traffic funneling heavier to legacy, flagship destination markets ( the Outer Banks, Orlando, Napa, Vail, Tahoe, Ozarks, NOLA, etc.) where consumers feel less “experience risk”. Notable negative impacts will occur in secondary travel markets (i.e., Airbnb markets) with extreme impacts on tertiary areas ( “middle-of-nowhere” Airbnbs). Both secondary travel markets and tertiary areas were artificially pumped from COVID lockdown escapism and the expansion of remote work adoption, and both will experience market corrections in 2023. Luxury real estate, although typically most impacted by EFFR and Quantitative Tightening compared with standard homes, will manage fairly well in legacy, flagship destination markets as traveler density, and therefore supporting rental income, cycles back from secondary markets and tertiary areas.

HOMERENTERSHIP REALITY SHOWS
Vin Vomero // Co-founder, FoxyAI

The erosion of the single greatest driver of wealth for Americans—homeownership—should be a major concern for everyone. Wealth growth from a home is largely attributed to home value appreciation and not from making mortgage payments to pay down the balance.

What happens when this piggy bank no longer exists? What happens when this wealth is diverted to—and more concentrated on—Wall Street due to a growing trend in Single Family Rentals (SFR) and the emerging build-to-rent trend?

There are many macro factors to consider in the movement away from homeownership to “homerentership,” and 2023 is poised to be a difficult year for home buying with the continued growth of interest rates, low supply, and rising inflation.

VENTURE COOLDOWN IN EFFECT
Kunal Lunawat // Partner, Agya Ventures

We are moving away from an era where capital was plenty and diligence was absent. Total capital deployed in venture was $300 billion in 2020, $630 billion in 2021, and is projected to be $439 billion in 2022. The 2023 numbers might reflect a greater reversion to the mean mapping to the pre-pandemic era. That’s a good thing for serious entrepreneurs and career venture capital investors.

Higher cost of capital and a sharp pullback in high-growth technology stocks have distinctly impacted valuations of privately held, late-stage technology companies. The birth of unicorns is one metric to gauge hype surrounding late-stage valuations. There are 1,192 unicorns in the world today: 136 were born in Q3 ‘21. The number declined to 25 in Q3 ‘22. This could partially be attributed to smaller round sizes, but the bigger picture is clear: companies need to earn their markups.

Sarah Liu // Partner, Fifth Wall

2023 will see significant consolidation across proptech start-ups as many of the companies that were able to raise during the glut of 2021, will find far fewer takers when they go back out to market. Sectors that were especially saturated such as construction site monitoring and sensor tech, as well as sectors that are seeing an outsized impact from higher interest rates (i.e., mortgage and residential closing), will be the hardest hit. Those that survive will be the ones who generate the strongest measurable customer ROI, ideally in a short (i.e., months not years) time frame.

CLOSING THE SPIGOT OF HOME EQUITY TAPPING
Matt Michalski // Co-founder, Aryeo

Now that capital is no longer free and real estate markets are no longer full of huge equity gains, startups helping homeowners tap into their home equity will see a major cooling-off period. The number of options available in the market will decrease substantially, but no one dominant force will emerge victorious.

STR NUCLEAR WINTER BEGINS
Brad Hargreaves // Founder & Chairman, Common

Oversupply and demand contraction are combining to make 2023 a very, very difficult year for the short-term rental business.

First, let’s start on the supply side. Airbnb listings are up 23% year-over-year with over 80,000 new listings coming on to Airbnb per month this past summer. Compounding the problem, a large portion of the new supply is investor-owned, dedicated short-term rental properties with lots of availability. The supply problem is likely to get worse over the coming year, as would-be home sellers with existing, low-rate mortgages choose to rent their homes out rather than sell into a tough market.

Things do not look better on the demand side of the equation. To begin, hospitality occupancy is very sensitive to macroeconomic conditions, and hotel industry insiders are forecasting declines in occupancy and ADR in 2023 in anticipation of a “mild” recession. It is also likely that 2021 and early 2022’s extraordinary run in STR revenues was partly driven by pandemic-era spending and behaviors that aren’t likely to continue.

Qualitatively, by early 2022 the short-term rental sector was getting get-rich-quick vibes as retail investors increasingly gained interest in the space. Articles targeting retired doctors and claiming 20%+ cash-on-cash yields is as close to a universal indicator of a peak as they get. There was also a growing cottage industry of picks-and-shovels businesses helping others buy and manage STR properties, with enough courses on getting rich in short-term rentals that we got lists and aggregators of courses on getting rich in short-term rentals.

No offense to plastic surgeons with a genuine hobbyist interest in hospitality, but a lot of this kind of content popped up on the internet in 2022.

In light of all this, a pullback seems inevitable and will hit publicly-listed companies (e.g., Sonder), privately-held firms (e.g., AvantStay) and retail investors all.

Expanding Multigenerational Living through ADUs
Brad Cartier // Head of Marketing, Hostfully

271%. That’s the increase in people living in a multigenerational household between 2011 and 2021. Further, Freddie Mac found that the share of young borrowers with a co-borrower age 55+ has doubled since 1994, spiking in 2021.

Zillow recently found that 18% of recent homebuyers purchased alongside a friend or relative, and 19% of prospective buyers planned to do the same.

The pandemic accelerated the adoption of multigenerational living arrangements: Caregiving is cited as the second most popular reason for multigenerational living, particularly in Hispanic, Asian, and Black households.

With 39% of buyers preferring a home “designed to house the buyer as well as a younger generation and an older generation,” many builders are taking notice by offering floor plans geared towards accommodating multiple generations. Lennar, for instance, offers new homes with self-contained in-law suites.

The benefits of multigenerational living are undeniable: shared budgets, caregiver access, socialization and quality time together, and dedicated space for everyone.That said, most of our housing stock isn’t designed for this eventuality. The year ahead marks an opportunity for real estate entrepreneurs to get ahead of this (re)emerging trend by building and renovating with grandma and grandpa in mind.

LETS (QUICKLY) CLOSE THE DEAL
Teresa Grobecker // CEO, Consortia

Lenders want to close escrow in 10 days or less. Why, you ask? As I always say on stage: follow the money. The cost of underwriting a loan has ballooned to over $11,000 and lenders are averaging losses of $800 per file.

The largest banks and lenders are adopting processes to stop the bleeding.

Given Consortia works with the GSEs (Fannie/Freddie), the Federal Reserve and the largest banks, credit unions and lenders in the country, we have a few confident expectations:

1. Title: In San Francisco, we waive our title contingencies. Are we crazy and off our rockers? (Yes, but for different reasons.) Clear chain of title can’t be rushed, hence why preliminary title commitments are done before listings go on the MLS. We are able to close in seven days because we underwrite the asset before going on the MLS. The largest banks are agreeing to this process to close loans faster.

2. Appraisal: A handful of the best lenders know that Fannie and Freddie are moving toward a 100% data driven appraisal system. (NAR even has a portfolio company that helps REALTORS gather this information as a gig-economy job alternative.) This data will be used for appraisal waivers and hybrid appraisals, shaving off weeks of the appraisal contingency timeline.

3. And last but not least, money: The Federal Reserve will be ready to settle transactions instantly 24/7/365 starting May 2023. The most reputable banks in the country with the highest SOC2 audit protocols are part of the rollout. Combine this with the new digital fiat currencies that the major G20 economies are rolling out (the “digital dollar,” as it’s known in the United States), and the United States will have the fastest, most secure real estate purchase money transfer system in the world.

Brokers who adopt these practices will have the competitive advantage to win more listings and close transactions faster. As we say at Consortia, slow is smooth, and smooth becomes fast.

PREDICTIONS

ROCKET MORTGAGE ACQUIRES REDFIN
Robert Hahn // Partner, 7DS Associates

With Rocket Companies having an advantage in the mortgage space but at a disadvantage in the home buying and selling space compared to Zillow, acquiring Redfin would be a way to one-up Zillow.

Rocket Companies is a $16 billion company right now. Zillow is about $8.5 billion. Redfin has fallen from grace and sits at $536 million. Rocket could buy Redfin for cash today; Redfin shareholders would likely be interested in a stock swap as well if that were offered. Redfin would give Rocket Homes an instant presence as a real estate portal. Plus, Rocket Mortgage could move Redfin’s W2 workforce to Rocket Homes to serve as in-house agents without too much difficulty. There is at least one very good reason for doing that: A W2 employee agent can (as per Glenn Kelman) sell every product the company has, including mortgage, without running afoul of RESPA. Zillow can’t do that with its Premier Agent network. Originally published on Notorious ROB.

ZUMPBNB
Matt Michalski // Co-founder, Aryeo

The Airbnb <> Zillow merger has long been talked about. But proptech’s leader will make a splash with another Z: Zumper.

Zillbnb meet Zumpbnb.

Airbnb began with short-term stays and has since evolved into stays of any length—just short of “permanent.” Meanwhile, Zumper has emerged as a leader in the long-term rental market, proving to be a formidable foe to the likes of Zillow Rentals and Apartments.com (Costar).

As Airbnb looks to solidify itself as the place to go when you need a stay of any length, associating with a name and company that has mastered the long-term market could bolster its brand as the “any stay” company. Zumper, on the other hand, has been experimenting with a Flex Living option and recently announced an MVP of Zumper Pass—a subscription for booking short-term stays.

Both are titans of their respective corners of the market on a complimentary yet competitive collision course. My guess is Zumper has a valuation in the $1-$2 billion range, a far cry from the $65+ billion market cap of Airbnb today, and certainly within the wheelhouse of the kings of proptech.

Maybe Zumpbnb will be enough to hold us over until the days of Zillbnb are upon us.

COSTAR ACQUIRES 3D
Matt Michalski // Co-founder, Aryeo

Costar acquires Matterport as it looks to execute on a similarly scary playbook that it has in commercial. That is, procuring and owning unique listing media to then build a moat between Costar and its competitors. Not only does Matterport possess leading 3D tech, but it owns the entire repository of Matterports created in the past year—all of the data within them—and has recently acquired VHT Studios, the largest real estate photography company in the US. Oh, and since Matterport’s 2021 SPAC, its stock is down nearly 90%, leaving it with a market cap of under $1 billion. If I’m Costar, I can’t let this deal slip through the cracks.

OPENDOOR TAKES TO PROPERTY MANAGEMENT
Drew Meyers // Founder, Geek Estate

In a financial pickle, Opendoor acquiring a tech-enabled property management company will make too much sense as part of building its marketplace. In what is now a two-horse race, the clear leader will nab a company such as Mynd, Darwin, or Pure to bring a guaranteed revenue generation vehicle in house for all homes on its balance sheet.

CONTECH CENTRAL

Stephen Del Percio // VP & Assistant General Counsel, AECOM

Infrastructure bill tailwinds finally propel the US construction industry forward. It’s been over a year since President Biden signed the federal infrastructure bill into law, promising over $500B in new spending on the nation’s roads, bridges, tunnels, ports, and airports over the next five years. But funding has been very slow to roll out and 2022 turned out to be a bit of a tease for us infrastructure nerds. That won’t be the case in 2023 – some big projects are on the verge of moving forward (Gateway Tunnel in NYC; the I-75 Brent-Spence Bridge replacement in Cincinnati) with many others in the pipeline. Expect a busy year in the civil infrastructure space, with plenty of knock-on impacts for stakeholders – from a continued brisk industry M&A pipeline to new startups addressing the talent shortage gap and archaic insurance markets, among many others.

The floodgates open in 2023 for renewable energy and EV charging projects in the US. Arguably the renewables space is already there; in 2022, for the first time, clean energy met over a full day’s demand on electric grids in California and Oklahoma. But in 2023 these types of projects will move into the civil infrastructure mainstream. We’ll continue to hear more about construction-related startups in the decarbonization space (which will require trillions of dollars in investment if the world is to reach carbon neutrality by the second half of the century). In the US, this will include carbon capture and EV charging; companies like Toronto-based SWTCH, which is focused on the multi-family and retail sectors, will grow and expand south of the border. IIJA money will fuel this boom, as will a push for local governments to implement innovative delivery methods to leverage the expertise of the private sector in delivering these sorts of solutions.

The fully autonomous vehicle market shrinks but assisted driving grows. On the heels of Carnegie Mellon-backed Argo.AI shutting down and legacy automakers like Ford reducing their investments in fully autonomous vehicles, 2023 will see other fully autonomous AV projects halt, shrink, or disappear. We’ll hear more about Apple’s electric car, which won’t be as autonomous as the public expects (or arriving anytime soon – now rumored to be pushed back to 2026). And assisted driving technologies will play a bigger role in projects that are funded under the IIJA, through companies like Alphabet-backed Cavnue.

Talent shortage forces legacy companies to merge or tech companies to absorb. Not social media but TSMC or Amazon bringing more functions in-house.

A DOUBLING DOWN ON COLLABORATIVE R&D
Dennis Steigerwalt // President, Housing Innovation Alliance

The pace of the homebuilding landscape in 2023 presents a significant opportunity to elevate solutions in overcoming housing supply and affordability issues.

2022 experienced a historically fast and deep drop in housing affordability, and it’s very likely that housing is permanently more expensive. 2020 began with a structural supply gap of around 1.5 – 2 million homes. To catch-up to current demand, the industry needs to deliver 1.7 million homes per year through the end of the decade. We nearly achieved this in 2021 with 1.6 million, but fell to 1.5 million in 2022—and experts forecast jus 1.2 and 1.4 million in 2023 and 2024.

In the face of the supply-demand gap, we continue to coordinate efforts on shared innovation initiatives. The paradox of cyclical industries investing in innovation is a function of time and money—we’re either too busy to invest or business is too slow to finance it. There are constant jabs thrown at the construction industry for its lack of productivity gains and investment into R&D, but that’s unfair. New ideas from top tier talent offer solutions for the industry, and an increasing number of highly visible, high impact projects are driving homebuilding forward.

We’ll continue to see significant investment in shared R&D along these pathways in 2023:

• Investments will expand the technology solution spectrum and enhance productivity in home delivery,optimizing project delivery in the field and at the factory.  There will be new government investment through programs such as National Science Foundation innovation engines to create robust bio-region economies focused on the future of construction.
• M&A activity continues. Fueled in part by domestic cash reserves and market-timing, but also keep an eye on foreign capital flowing from countries with longer investment horizons and leadership teams firmly targeting projects grounded in ESG principles.
• Builders will design and deliver prototype homes to demonstrate how we can improve livability, reduce costs, and minimize the built environment’s footprint on the planet. Business practices to deliver low carbon construction will take hold in 2023. In a tight market, builders will win residential projects, and consumers, through this differentiation.

Closing

And, with that, that’s a wrap! Agree or disagree? What are we missing? Leave your thoughts in the comments.

The post Looking Forward to 2023: Slow and Steady Wins the Race appeared first on GeekEstate Blog.

[Editor’s Note: Below is the full text of Part I of our 238th Weekly Transmission, originally delivered direct to the inbox of more than 600 GEM members on January 4th, 2023.]

It’s 2023, and founders need to be ready to answer a question seemingly nobody has cared about since 2009: “How quickly can your company become profitable?”

From 2009 to 2022, the world was awash with historically cheap capital searching for yield due to the zero interest rate policy (ZIRP) the Fed implemented to combat the Great Recession. High-growth companies like Uber, Lyft, WeWork, Snap, Airbnb, and Twitter that largely defined the last decade and a half of startup successes delivered those yields to institutional investors by creating category-killing companies that both improved customer experience and took market share at all costs.

For these winners, profitability was a proverbial can kicked down the road. All that mattered was growing revenues aggressively by taking market share from traditional companies in the massive market of your choosing: transportation, office, dating, travel, hospitality, news, blogging, anything-delivery, real estate. The cheap fuel of venture capital was ubiquitous and startups were implored to put on blinders and grow at any cost. Those who built growth engines capable of meeting aggressive milestones were fed additional fuel, which kept the growth engine firing on all cylinders.

The prevailing belief: once these companies had dominated their respective markets, an eventual transition from cash-guzzling market disruptor to dividend paying blue chip would figure itself out. The next Apples, Microsofts, Googles, Amazons, Intels, Salesforces, and … you get the idea … would take their places as the next generation of market leaders. This was Silicon Valley’s circle of life, and these feisty, hard-charging startups were its Simbas.

As per the playbook, the disruptors changed the way many of us lived our day-to-day lives (when’s the last time you hailed a taxi outside NYC?), but the companies and investors enabling those transformations did so mostly ignoring Warren Buffet’s two rules of investing. Rule No. 1: Never lose money; Rule No. 2: Never forget rule No. 1.

When late-stage funding rounds made way for S-1s, it was revealed that many of these mega growth companies were not just losing money, they were doing so like red comma generation  was an Olympic event and the only chance of making the podium was pulling a hat trick.

It didn’t matter. The companies went public anyway, and the markets continued to finance their growth. Between 2018-2021 hundreds of SPACs formed to take more money-losing companies public. It seemed the capital markets merry-go-round only had one button on its control panel: faster. By January 2022, prices for both private and public growth companies in the tech sector hit an all time high.

In the same year (albeit a parallel universe), Jerome Powell and the Fed began raising interest rates to combat runaway inflation, at first to no avail. Inflation remained stubborn. So the Fed stayed the course and raised rates again. And again. And again. Gradually, then suddenly, the flow of cheap capital stopped. By late 2022, capital-intensive, unprofitable technology companies shed between half to 95% of their value. Retail and institutional investors alike got burned. Contagion spread to the entire sector; even tech bellwethers like Apple and Microsoft took a nearly 30% haircut.

LOOKING AHEAD
What is a startup or an investor left to learn? It’s absurd to reason that optimizing for strong growth is bad—truly, any company with a product that creates value for customers should grow. But the Fed will continue to grind the gears of economic growth, and the cheap capital financing meteoric startup growth for companies without a plausible path to profitability has dried up faster than the Los Angeles River. The age of cheap growth is a bygone age; growth in 2023 and beyond will be earned, not bought.

Imagine startups are race cars and interest rates are gas prices. When gas is cheap and it’s a drag race to the SPAC that takes you public, acceleration is all that matters. Now that gas is expensive and the finish line further away, acceleration takes a back seat to gas mileage. For the first time in a long time, the tortoise is sexier than the hare.

Startups shouldn’t optimize to meet Warren Buffet’s standards for company profitability. Buffett invests mostly in de-risked, low alpha companies with mature, stabilized cash flows. VCs comb the earth for high alpha opportunities where they can take calculated, concentrated risks on companies with asymmetric upside potential.

Today, as in the bygone age of cheap growth, startups and investors alike will continue to take and embrace risk. Like KPCB cofounder Tom Perkins said:

If there is no risk, you have already missed the boat.

But in 2023, look for startups to begin architecting slower, steadier, more sustainable growth models that yield more capital-efficiency—perhaps even profits!—prior to an IPO.

Graphic designed using Jasper.
Prompt: turtle and rabbit fighting over dollar bills

the GEM BRIEFING

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The post The Sexy Tortoise appeared first on GeekEstate Blog.

CityBldr is a marketplace used by large real estate operators, developers, and investors to locate, analyze, and trade underused properties in any real estate asset class through proprietary analytics.

After working exclusively with enterprise companies since 2018, CityBldr launched its first SaaS product, Local, which makes it easier to find suitable places for housing developments through a simple search. To help ensure that The American Dream doesn’t continue slipping further and further away from working-class families, the company worked with researchers at MIT, Harvard, and Berkeley on the new product offering.

Regularly priced at $295 per month, the product is currently free to try in Seattle. However, for the first 90 days after its release, it will have an introductory price of $99 per month and in Miami, where CityBldr’s platform is predicting the next housing affordability crisis, it will be free for two weeks after its launch.

Learn More

Disclosure: I’m an investor in the company.

The post CityBldr’s First SaaS Product is Taking on the Housing Crisis appeared first on GeekEstate Blog.

[Editor’s Note: Below is the full text of our 237th Weekly Transmission, originally delivered direct to the inbox of more than 600 GEM members on December 22th, 2022. Below, I look back on a year that saw iBuying turmoil, carnage in the public markets, 3D printing milestones, and huge advances in generative AI. Plus, a variety of GEM members reflected on their 2022 predictions. Many links included are to members-only articles, so won’t be accessible without an account already setup.]

Image created with: Jasper Prompt: New Years celebration over a city skyline reflecting houses reflecting technology with text reading “2022”

Mortgage rates went up, and buying houses became harder.

Yeah, that happened. And the trickle-down effects were many. iBuyers have their tails between their legs, departing faster than they arrived on the scene. With mortgage originations down substantially (47% YoY in Q3), startups touching mortgages are reeling. After the unanticipated booming housing market of 2020 and 2021, this year was a doozy for players on every side of the equation: sellers and buyers, brokerages, property managers, landlords and tenants. The 2022 macro left no one unaffected

Here’s a snapshot of the most notable newsy moments:

1. iBuying Turmoil: On the residential side, iBuyer carnage is the most prominent story from 2022. Zillow’s exit at the end of 2021 was a bombshell, but would have been far worse if they waited even a few months later. It was a telltale sign of trouble ahead. Opendoor is reeling with a huge stock price decline over the past six months, hoping shuffling the executive deck will help un-muddy the waters. Offerpad is teetering on being delisted. RedfinNow is no longer.

The silver lining is, as part of their recent leadership reorganization, Opendoor launched its third-party Exclusives marketplace–which will be one of the most compelling stories of 2023.

PS: Check our iBuying Ecosystem Intel.

2. Public Market Carnage: Almost every public proptech company took it in the teeth on valuation. With a dearth of IPOs, late-stage got shaken—yet seed just rolled right along. While significant capital is sitting on the sidelines and waiting, capital deployment was not at a standstill: Veev raised a mound of cash to advance prefab, Italy-based Casavo raked in $400 million to try its hand at iBuying in Europe, and Roofstock took in $240 million to continue marching. Meanwhile, Flow managed to secure $350 million in a pre-seed round to re-build WeLive, trying to crack the nut of branded long-term rentals.

3. SFRs for the Win: The drop in home sales has been a boon for rentals. Based on sentiment at IMN’s Scottsdale event, single-family rental investors are thriving. All of which boded well for the array of tech vendors servicing them.

A sign of things to come: Zumper’s first-mover expansion into short-term rentals means vacation, monthly, and long-term rentals in one interface. This morphing of traditionally separate inventory will unlock new efficiencies, and blend the lines of what it means to live and travel.

4. 3D Printing Advances: IMHO, the most exciting story of 2018 was the partnership of NewStory and ICON on a 3D home printer. The sector continues to progress, and it’s likely we’ll look back on 2022 as the year it crossed the chasm into mainstream. Mighty Buildings made strides by completing delivery of an early Zero Net Energy in Southern California. ICON had a banner year, announcing plans to kick-off construction of the 100-home 3D-printed community in partnership with Lennar, and was awarded a $57.2 million contract from NASA to continue exploration of the Moon and Mars. With so many players contributing in the space, there is no doubt that 2023 will bear witness to continued technological progress.

Image created with: Jasper Prompt: generative ai, chatgpt, AI images

5. Generative AI Breaks Out: Jeff Turner’s Creativity and the AI Revolution shook me. I’ve been thinking about the technology and use cases ever since. The power and speed of iteration are like lightning. No more proof is needed than the constant chatter ever since ChatGPT was unleashed on the internet less than a month ago. I haven’t been able to avoid it since.

And, now, AI created objects are a thing. Where does it all end? The only reason this is number five and not number one is that it’s not proptech specific. But it’s literally going to impact every industry in profound ways. In weeks and months, not years. Brace yourselves.

REFLECTIONS FOR 2022

How did we fare? Let’s take the time to reflect on several of the predictions and trends published a year ago.

Without further ado …

PROPTECH TRENDS

WEALTH MANAGEMENT TAKES CENTER STAGE
Drew Meyers // Founder, Geek Estate

I stand firm in my belief that agents and brokerages who don’t make the jump to wealth managers will be out of the business in five or 10 years. You may also recall that Ryan Coon called for the continued convergence of real estate and personal finance in our 2020 predictions.

2022 will be the year that the deep intertwining of real estate, finance, and wealth management becomes utterly apparent. I’ll admit that Truebill and its 2.5 million members were a foreign company to me prior to Rocket Cos’ $1.275 billion investment in the personal finance app. But the sheer size of investment in the trend is a staggering bet by a $30 billion dollar mortgage giant. They aren’t dummies, nor are they messing around. The next step is layering an Awning-esque investment brokerage on top of Truebill. That, and more, is coming. The waters are getting increasingly murky for real estate agents who aspire to capitalize on consumers’ desire for investment advice: They will need to understand the entire landscape to thrive.

DM: Conceptually, more of the industry has moved toward this vision over the past twelve months. But, I don’t see much in the way of actual adoption/changes at the macro-tech level. One of my favorite Transmissions of 2022 re-imagined a future in which real estate websites don’t lead with a prompt to “search for homes.” So, there’s that to dig into for the believers out there.

Verdict: Draw

HOUSING AFFORDABILITY
Matt Hoffman // Partner, HousingTech Ventures

“Meet the new boss, same as the old boss.” As The Who so aptly sang in Won’t Get Fooled Again. The year ahead is unlikely to look too different from 2021 as we continue to stagger from the effects of Covid-19, coupled with the looming uncertainty of the 2022 elections in November and the ongoing chorus of complaints about housing unaffordability by those: doing nothing about it, continuing to do the same things that are enabling it, or actively opposing innovation and change in order to protect their own little patch of dirt.

Having said that, here are some things that I expect to see in 2022:

1. Consolidation: A bunch of housingtech startups are going on their third or fourth years in need of cash and market share, and all of them  are seeking the same customer.  As gas tanks empty, expect to see a slew of mergers between startups with similar and complementary solutions. The cream of the crop will get picked up by the largest incumbents, such as RealPage, CoStar, and Zillow.
2. Agitation: We are going to start to see pushback on the single family rental market as jurisdictions enact “no-rent” covenants on detached single family homes (not unlike in some condo regimes).
3. Identification: Bad actors in the multifamily market are going to be exposed at a greater rate as municipalities adopt technologies that enable more transparency with regard to violations and enforcement, and empower renters to document and pursue their rights.
4. Re-imagination: Work from home has given the suburbs new life and threatened some cities (e.g. DC lost 2.9% of its population in 2021). Planners, politicians, and business groups are more actively engaged than ever in figuring out what a different future looks like, and that means opportunity for people with innovative housing solutions.
5. Digitization: we will lay the groundwork in 2022 for a blockchain based real estate economy that will be the SOP in 2025, from title, to finance, to closings, to tax, to brokerage, to fractionalized ownership.

Regardless of how 2022 plays out, expect a growing group of people dedicated to making the housing market a more transparent, equitable, profitable, and sustainable place to do business…and the GEM will play a role in bringing them to the table.

Bryan Copley: Numbers one and two above are both accurate. Ofo Ezeugwu‘s Brooklyn based WYL is part of Matt’s third trend, and the DOJ is investigating rent setting company RealPage over claims it recommended rent increases over market averages. Number four is also a win: Cities are creeping back, some faster than others–but the suburbs have been the clear winners during the pandemic (2020-22).

Regarding number five, FTX and “crypto winter” have had an (unfortunate) negative effect on blockchain based technology adoption. Matt may have been 5/5 if it weren’t for bad actors in this emerging space. ChatGPT / conversational AI has taken the buzzword baton and will run with it well into 2023, leaving blockchain based technology solutions building in another category’s shadows for the first time since the beginning of the pandemic.

Verdict: Win

RACING TOWARD BUYSIDE EXTINCTION
Jim Klinge // Broker, Compass

Eliminating buyer-agents is the easy solution to reach buyside extinction, and it’s well underway. Redfin has dumbed-down buyer representation by paying their newest agents $50 to open the door for buyers. These new agents literally have no experience or anything to offer the buyers as far as advice, and are directed to the professional agent back at the office for help—oh, great, to someone who has never seen the home. The resulting trend is to expect nothing from buyer-agents, and now the big listing teams treat outside agents like the enemy. Buyer-side commissions are dwindling, there is no transparency about making offers, and buyer-agents are treated with disdain. By now, home buyers don’t think they need help—heck, they can find all the homes for sale online—what else is there? When they find one they like, they can reach out directly to the listing team. Soon, there will be no need for the MLS, and the search portals will be optional. But the listing agent can, and will, charge 4% to 5% to transact. It will be called compression, but it is a result of the industry ignoring the value of buyer-agents for decades that they will become extinct.

Jim: The last sentence has surely come true, and will probably never change—no one in the industry will ever appreciate and publicize what buyer-agents do for work. As a result, they are dying a natural death. And I mean that literally, as the old-guard realtors that brought decades of experience to assisting buyers fade into the sunset. Now, new agents are assigned the buyer prospects and told to get them into a house. With the public never having benefited from working with a buyer-agent, they won’t miss them when they’re gone: As far as buyers are concerned, working with the listing-agent’s team got them the house.

Realtors who make up the old guard—those with 20+ years experience—still have a box of business cards. Those who pay dues every year will still be ‘in business,’ technically. But with buyer-agent compensation being crushed by greedy listing agents, there is less incentive than ever for senior realtors to do the tough work with buyers when they can instead cruise to Baja.

Some day—and it could happen in 2023—a major company will emerge who spends hundreds of millions on advertising to attract consumers to their home-selling machine. What that machine looks like doesn’t matter—it’s because they spent the advertising dollars to get the customers that causes them to take over the industry.

Verdict: Draw. The number of agents in California grew by 3,769 this year, which is 1.8% higher than it was at the end of 2021. But we also added at least 36,000 new agents—we’ll see how many pay their dues again next month. It costs about $3,000 every January to stay employed by Compass and similar  firms. I’d guess that at least 100,000 won’t renew, but how will we know?

RISE OF THE LIVE ANYWHERE MOVEMENT
Jimmy Woodard // Co-founder, Cloud Castles

Look, we all know the WFH phenomenon isn’t going away. It’s impossible  to put the cat back in the bag regarding our collective and  newfound lifestyle flexibility. Nomadism is here to stay (a history lesson for those keen to dive in).

To capitalize, Airbnb will launch two initiatives:

1. “Live from anywhere,” targeting the medium-term rental market
2. “Work from anywhere,” offering office spaces, houses, and ADUs as workspaces, which will come with a merger with WeWork (or a smaller competitor such as DeskPass, FlexDesk, or Codi)

DM: Airbnb’s Friendly Apartments program means a “Live from Anywhere” reality is alive and well. The second part of this was nowhere to be had in 2022, though with WeWork’s stock price having dropped 90%, perhaps 2023 will be the year.

Verdict: Win

GO FOR BROKE ON SECOND HOMES
Drew Meyers // Founder, Geek Estate

At prices upwards of $500,000 and even north of $1 million, the audience for shares of Pacaso homes is limited. But, once share prices drop close to $100,000, or even less, shares in second homes will fly off the shelves. The largest opportunity is not to target those willing to pay a million dollars for a slice of a $5 million mansion, but rather offering fractional ownership on a $200-300K ski cabin.

Pacaso already had a crazy 2021, leaping from a $75 million Series B straight into a $125 million Series C in a matter of months. Expect more funding, and the driving down of share prices. And, don’t worry, if you can’t afford U.S. prices: A few international players have exported the model to Central America and beyond (Ancana/Kocomo in Mexico).

Remember, if the idea of a Pacaso-style proptech house shared among founders, execs, and VCs interests you, I’d love to hear from you.

DM: There have been new entrants in the category, but not much on the budget side. While Delara is targeting $25k per share, I wouldn’t say they or anyone else have proved a sustainable businesses can be built selling lower price points.

PS: I’m still interested in the proptech house idea. Most likely in Latin America. Reach out if you’re so inclined.

Verdict: Lose

COSTAR LAUNCHES A MLS IN THE METAVERSE
Robert Hahn // Founder, 7DS Associates

CoStar has never operated an MLS. It operates the closest thing to an MLS in the commercial real estate world, but in residential real estate, with all of the complications and different cultural norms from commercial, CoStar is a total novice. Before it can step in as a white knight, CoStar probably should know a thing or two about operating an MLS.

The Metaverse offers them the perfect opportunity to do so.

If digital land and digital buildings start trading, buyers and sellers and landlords and tenants will need a single place that has all of the inventory with some kind of verification of the property. I expect that CoStar will be a player in digital CRE in the Metaverse; they have the expertise, the credibility, and the opportunity to become that. It is a trivial matter, then, to extend that system to digital “residential” real estate as well. I’d guess that personal homes won’t be a huge thing in the Metaverse because, well, people don’t actually live in the Metaverse. But having been a longtime MMORPG fan, who owned a virtual house, furnished it with my trophies, had parties and Guild meetings there and so on… I’m fairly certain that at least some people of the Metaverse will want to own their own virtual “homes.”

It’s not a perfect match for the MLS in the real physical world, just like the Metaverse is not the real physical world. But it’s a close enough representation, just like the Metaverse is, and it will provide much needed practice for the team at CoStar to be ready for when the rules of the physical world changes. (Read longer version here).

Rob: Obviously, I got this wrong, wrong, wrong. Big part of it, of course, is that I wanted a way to work the metaverse into the real estate conversation, but the other big part of it is that the metaverse as it exists today is merely a curiosity for gamers and geeks.

Now with the collapse of the crypto market (long overdue, and really a positive development overall), I suspect that it’ll be a while before we see CoStar or anybody else offer an MLS in the metaverse.

The Metaverse is, for all intents and purposes, kind of dead. The action will and should move to Mirror Worlds, which have real world utility and are pretty amazing.

Verdict: Lose

BLOCKCHAIN ACTUALLY BECOMES USEFUL
Teresa Grobecker // CEO, Real Estate Consortia

Appraisals have become increasingly expensive and time-consuming as fewer people become appraisers. Appraisals are disproportionately more expensive in inner cities and rural areas, which disproportionately impacts lower-income buyers and minorities. In October 2021, the FHFA announced that desktop appraisals will become the norm, not just a bandaid during the pandemic. Going forward, realtors will still play an instrumental role by collecting the appraisal information through a Facetime-like app with a licensed appraiser. The sanitized report will remove racial bias from appraisals and the process will offer affordability and a quicker turn. Appraisal inspections—along with AVMs, inspection data, and land reports—will all be packaged and uploaded to the blockchain ledger as data NFTs pre-listing.

And finally, seller title policies will be logged on the blockchain and used as title-starters (the seed of a title report). Blockchain can also potentially reduce search fees, which are hard costs incurred by title companies. Reducing these hard costs could potentially pass savings on to the customer. Title insurance (finally) becomes more affordable.

As blockchain finally grows up and provides trackable monetary utility in the real estate transaction, real estate transactions will happen faster—DOM will drop by half—and transaction fees will undergo a pricing transformation.

Teresa: The market put all loan origination and appraisals into a blender this year. After many Fannie and Freddie meetings, both have indicated that they will rely even more heavily on data and floor plans and less on appraisals. Banks and lenders are eager to adopt streamlined processes to reduce loan origination, which now costs over $11,000 (and still loses $800 per file!)

Verdict: Draw

METEORITE HITS THE SPAC MOVEMENT
Drew Meyers // Founder, Geek Estate

Vacasa, Sonder, and Inspirato are all embracing SPAC partnerships. Southport Acquisition Corp and its Ellie Mae veterans are seeking $234.6 million and a mortgage and real estate partner. And, amidst the recent lay-offs mess and Vishal Garg’s resulting “break,” the Better merger with Aurora Acquisition Corp is likely to proceed. All that said, the proptech SPAC craze will officially evaporate/crater in the year ahead.

The public markets simply don’t support the current valuations of companies being taken public. View is down since hitting the market, as are Hippo, WeWork, and Latch. Let’s be honest: How much proptech can public markets absorb? There are only so many transformative companies able to scale in the wake of skyrocketing customer acquisition costs in this age of endless noise.

DM: I was emphatically right on this, majorly right. In fact, the equity evaporation is even worse than I ever imagined.

Verdict: Win, though it’s really a loss for innovation.

CONSOLIDATION + M&A
Matt Knight // Founder, Proptech Angel Group

As great as the SPAC-a-palooza was in 2021, don’t expect that to continue in ‘22 (agreeing with Drew). It wouldn’t surprise me to see the same quantity of PropTech exits in 2022 as ‘21 but via a different avenue. One of our most important IPOs will be among them, and there are multiple interesting late-stage PropTech companies that will be highly-compelling acquisition targets.

Much like VTS did with Rise and Lane, expect to see more consolidation in the crowded niches. With all of these newly-public startups awash in cheaper capital, expect them to start buying more than they build relative to their feature sets.

And I wouldn’t confine that simply to the younger startups. With RealPage (Thoma Bravo) and Entrata (Silver Lake) now PE-owned, look for the PE playbook – sell/close non-core or low-margin business units and buy high-margin or new-market businesses.

Matt: We did have a nice SPAC exit with Appreciate. With capital markets being wonky, IPOs have dropped to essentially zero. So, my “most important IPO” didn’t happen, but it did have a big, private financing round.

There was plenty of consolidation in the space but less than I expected. It’s nice to see mature companies like HappyCo buying Yuhu, and there are a lot of these in the works behind the scenes. Maybe this bleeds into next year, but I expected to see the most popular categories trim down to two or three major players,and it hasn’t happened yet.

Same with the PE guys. They’ve been pretty quiet so far this year with all the market tumult, and it makes sense in retrospect that they would be relatively circumspect this year. I still believe in the trend, but it didn’t happen at the pace I expected. Maybe next year . . .

Verdict: Draw

CONTINUED EFFICIENCY GAINS PRICING RESIDENTIAL ASSETS
David Bluhm // Co-founder, Plunk

The world’s largest asset class both demands and deserves better than Home Price Index Reports based on a data-limited approach, published quarterly and reflecting information that is more than 60 days old.

As Wall Street moves more intentionally into residential real estate—now investing in housing at a massive scale—there will be an increasing push to develop the same analytical and forecasting tools that enable confident and frictionless investing in most all other asset classes. This will require both access to real-time, ground-truth pricing for an individual home as well as real-time tracking and monitoring of overall market and segment performance.

David: This past October, CNBC’s Senior Real Estate Correspondent, Diana Olick, commented during a morning financial markets round-up on the most commonly cited Case Schiller, S&P CoreLogic Home Price Index. She quipped, “I always complain that this particular index is wildly outdated, because it’s not only backdated by two months, but it’s a three month moving average, so really it goes back five months.” Her comment clearly outlined the market’s need for something more reflective of a highly active and dynamic real estate market—real-time valuations like what Plunk is adding to the marketplace. As home prices advanced during COVID, there was little doubt as to direction. Since then, the overall US home market has slowed, cooled, softened or steadied—market performance has varied wildly by geography, and continues to do so.

Meanwhile, new forms of real estate ownership are coming as promised. In fact, Pete Flint  recently shared that, “The real estate industry is evolving towards rapid, transparent, and digital transactions and changing models of ownership.” He goes on to explain that we are just starting the third generation of real estate innovation. Pete defines the first generation as the “Information Generation,” where players like Zillow, Trulia, and Redfin directly empowered home buyers with access to listing and market information. The second was the “Transaction Generation,” where inefficiencies, time, and cost squeezed out of real estate transactions (this is where we are currently). Now, we are just entering what he calls Real Estate 3.0—or the “Ownership Generation,” where new forms of ownership open up RRE to many new types of investors. We are indeed still early, but the need to transact RRE faster and with more fully informed confidence seems clear.

Verdict: Draw. Right, but still just the earliest of adopters.

THE BIG GO BIG IN M&A
Greg Robertson // General Manager of MLS, Lone Wolf Technologies 

The past few years have been all about PE firms gobbling up smaller independent software companies, W+R Studios being one of them. In 2022, the consolidation will continue but it will be the bigger companies merging with other larger companies to become even bigger entities.

Greg: Inflation and the rapid rise of interest rates put a cooler on the real estate market any new acquisitions and any in progress.

Verdict: Lose

Overall 2022 Proptech Trend Score: 3-3-5

RESI PREDICTIONS

ZILLOW-AIRBNB DO THE UNTHINKABLE
Drew Meyers // Founder, Geek Estate

Rich Barton is no stranger to big bets, having already acquired Zillow’s largest competitor and the number two residential portal back in 2014. This time, he’ll see that joining forces  with Airbnb offers the chance to achieve complete domination over demand for short-term, midrange, and long-term accommodations, as well as deliver near unlimited real estate porn for voyeurs. There is an immense opportunity to better serve home sellers with a marketplace that offers what they genuinely want:

Any and all options to monetize their most valuable asset. That means everything from a Zestimate to a CMA to multiple cash offers from competing investors. Beyond that, an estimate for both long-term and short-term rental income, as well as a binding “bid” by a verified property management firm to take over management of the home in exchange for a percentage of the revenue.

The two companies working jointly on a home ROI dashboard with a built in marketplace would be a home run. Can egos and incentives line up?

DM: Nope, not this year. Even though Airbnb became a legitimate player in the long term rental market, I’ll have to continue dreaming about the day the two proptech darlings join forces.

Verdict: Lose

COSTAR NABS ZAVVIE
Drew Meyers // Founder, Geek Estate

It’s no secret CoStar has set its sights on Zillow. On the heels of Zillow’s exit from iBuying, I made the case for Zillow acquiring Zavvie and integrating its product as the de facto “marketplace” into Zillow’s Premier Agent offering. CoStar snapping up Zavvie from under Zillow’s nose would be a nice move to stir the pot … and give them even deeper inroads with Zavvie’s very strategic network of mid-size brokerages.

DM: CoStar failed to take the strategic player off the chess board. I am still a believer that there is an offer Lane Hornung and Stefan Peterson won’t be able to refuse coming. Thus, I’ll push this prediction to 2023 or 2024.

Verdict: Lose (for now)

REDFIN AND FLYHOMES GET HITCHED
Drew Meyers // Founder, Geek Estate

I can’t image the year ending without at least one of the major power buyers (Ribbon, Homeward, Flyhomes, Knock, Orchard) being acquired by a publicly traded market leader. The union of two Seattle-based tech-enabled brokerages fits the bill for Redfin, a company that historically has not been super active in the M&A department (however, they did acquire RentPath in 2021).

DM: Before the real tsunami that wiped out proptech market caps far and wide, we did see Accept.inc acquired by HomeLight. However, I think it’s safe to say a Flyhomes-Redfin union is off the table for the foreseeable future, as they both have gone through lay-offs (Flyhomes, Redfin) and Redfin no longer has a market cap to afford it a chance to attempt such a merger. That said, I’m with Bryan Copley on Redfin: they’re down, but not out.

Verdict: Draw

Overall 2022 Resi Prediction Score: 0-2-1

CONTECH CENTRAL

Stephen Del Percio // VP & Assistant General Counsel, AECOM

Civil infrastructure will remain central to the zeitgeist of the US built environment:

Another natural disaster—hurricane, heat wave, tornado, flood—will wreak havoc on critical components of US infrastructure (I wrote this prior to hundreds of motorists being stuck for 19 hours on I-95 in northern Virginia during a major snowstorm less than three days into the new year) while at least one high-profile infrastructure project funded through the IIJA (i.e. the Biden infrastructure bill) breaks ground prior to the 2022 midterm elections in January (the Gateway Tunnel in the NY Metro area, maybe?). Either, or both, will renew criticisms that the IIJA was too small and support a push for additional infrastructure spending in a new version of the Build Back Better Act, which stalled in the Senate prior to the 2021 winter recess.

As new federal (and state match) spending shakes loose from the IIJA, savvy entrepreneurs will apply existing proptech solutions to create new infrastructure-related data sets and run analytics against them, helping public- and private-sector actors capitalize on new project and investment opportunities created by this new funding environment.

I’m not entirely sure what this one will look like. But with $500B+ in new federal spending on its way (although perhaps not until the second half of calendar 2022), there is a lot of opportunity here to redirect venture and human capital out of the trenches of construction job site hardware, where so much of the contech activity has resided over the last few years.

The AEC industry leans hard into blockchain tech; a major legacy player launches a cryptocurrency, a token, or an NFT that crosses $1B in market cap.

According to sites like cryptoslate.com, most of the tokens launched to date that have some connection to transportation- and/or energy-related solutions are trading well below $50M in market cap (with a handful of exceptions). The engineering brainpower and push for digital innovation within legacy AEC companies will figure out a way to capitalize on NFTs and/or the fledgling metaverse land grab.

Stephen: First, and as I’ll detail in my 2023 predictions after the holidays, funding from the federal infrastructure bill has been slow to roll out (for a variety of reasons). 2022 wasn’t the year for civil infrastructure – but 2023 might be! So I’ll score this one a draw as plenty of funding opportunities for important projects opened up – it’s just taking some for the spigots to turn on. TIE.

Second, although there were some interesting new contech products that launched in 2022 (check out digital AECOM’s “PipeInsights” and “planEngage”) the kind of solution I envisioned last January when I made this prediction remained elusive. If Drew allows it, I’ll double down here in 2023; I still believe that there is a big consumer-facing opportunity at the intersection of infrastructure, data analytics, and real estate. TIE.

Finally, I probably deserve more than one loss for my contech crypto prediction disaster. While I’m still a believer in blockchain applications for our industry, I haven’t put a penny into my Coinbase account in months, and this prediction feels like it came from a different world. UGLY LOSS.

Verdict: Like the Hartford Whalers opening a 1980s season in the NHL’s old Adams Division, I went a mediocre 0-1-2 with these predictions.

Overall 2022 Contech Prediction Score: 0-1-2

And with that, let’s turn the chapter on 2022. Our “2023 Predictions” and “The State of the GEM” will come out after the New Year. Have a happy holiday season.

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The post Looking Back on 2022 appeared first on GeekEstate Blog.

[Note from editor: The “Mastermind Showcase” highlights companies and news from members of the GEM. Today’s showcase: Miravel]

Designing, manufacturing, and distributing Wall Gardens, Miravel helps people grow fresh food in urban environments. The Wall Garden leverages AI to adapt to its surroundings and automatically grow fresh greens, herbs, and microgreens.

They currently have installations in the lobby of the Moran Apartments in Oakland and the communal kitchen of a new pod hotel, Stay Open, in Venice. Another application of their Wall Garden is being tested in the office settings of an engineering firm in Seattle, Facture, and an industrial design firm in Thousand Oaks, RKS Design.

What we like: An ESG initiative that combines elegant, yet compact designs, the company is bringing a popular trend – community gardening – directly into urban environments to increase accessibility to fresh produce. 

Learn More

The post Adding Fresh Food to Urban Environments appeared first on GeekEstate Blog.